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Chevron Pipe Line Co. v. Pacificorp.

United States District Court, D. Utah, Central Division

September 6, 2017

CHEVRON PIPE LINE COMPANY, Plaintiff,
v.
PACIFICORP, d/b/a ROCKY MOUNTAIN POWER, Defendant.

          ORDER AND MEMORANDUM DECISION

          Tena Campbell, U.S. District Court Judge.

         During a 2010 summer storm in Salt Lake City, an electrical arc from Rocky Mountain Power's (RMP) electrical transition station created a hole in a crude oil pipeline owned by Chevron Pipe Line Company (CPL). Oil leaked into Red Butte Creek and flowed downstream.

         Individual residents living along the creek sued CPL and RMP. Then CPL and RMP subsequently filed claims against each other in the same suit.

         Now RMP asks the court to eliminate one category of damages that CPL seeks from RMP: settlement payments to the individual residents (the Homeowners). For the reasons set forth below, RMP's motion for partial summary judgment concerning CPL's contribution claim for settlement payments is GRANTED.[1]

         BACKGROUND

         After the June spill, which prompted a sizeable cleanup by CPL, a second release of crude oil occurred in December 2010. RMP was not associated with the December release.

         As noted above, after both spills occurred, the Homeowners filed claims against CPL for trespass, nuisance, and negligence, [2] and sought damages caused by both spills. Ultimately, CPL settled with the Homeowners and, as required by their private settlement agreement, paid an undisclosed amount of money to the Homeowners in exchange for dismissal of claims.

         In the meantime, CPL filed a counterclaim against RMP alleging negligence, trespass, private nuisance, and violation of the federal Oil Pollution Act (OPA). Among other damages, CPL demanded reimbursement from RMP of some, if not all, of the settlement money on the theory that RMP's tortious acts caused the Homeowners' damages. RMP now moves for partial summary judgment on CPL's claim for reimbursement, asserting that CPL's request is a claim for contribution, which is barred by the Utah Liability Reform Act (ULRA), Utah Code Ann. § 78B-5-820.[3]

         ANALYSIS

         A court must grant summary judgment when the moving party “shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a). In its motion, RMP does not seek judgment on any of CPL's claims. Instead, its request for partial summary judgment focuses exclusively on a line item of CPL's overall summary of damages. CPL, in its opposition, contends that RMP's request for partial summary judgment on certain damages arising under separate causes of action is procedurally improper and would result in an advisory opinion by the court. The court disagrees.

         The plain language of Rule 56 allows a court to grant partial summary judgment on a portion of a claim. “A party may move for summary judgment, identifying each claim or defense-or the part of each claim or defense-on which summary judgment is sought.” Id. (emphasis added). Damages are part of a claim. See, e.g., Hamblin v. British Airways PLC, 717 F.Supp.2d 303, 307 (E.D.N.Y. 2010) (“[T]he word ‘claim' in Rule 56 is not limited to the theory of liability that a plaintiff asserts. A theory of liability is useless to a plaintiff without remedies flowing from that claim[.]”). Given the flexibility Rule 56 gives the court, and because the settlement payment is a discrete, well-defined portion of CPL's damages claim for damages, the ruling is not advisory and RMP's motion for partial summary judgment is proper under Rule 56.

         In its motion, RMP cites to the ULRA to support its contention that CPL may not recover the settlement money paid to the Homeowners because the claim is one for contribution, which the ULRA bars. Although the court agrees that CPL may not recover the payment from RMP, the court does not reach the question about whether the ULRA bars recovery, because a more fundamental basis exists for excluding CPL's recovery of the settlement. Specifically, under Utah law, a party who enters into a private settlement agreement with another may not recover that settlement payment from a third-party. The Utah Supreme Court articulated that rule in Zions First National Bank v. Fox and Company, 942 P.2d 324 (Utah 1997).

         In Zions Bank, Plaintiff Zions sued Co-Defendants Fox and Foote and alleged that “but for defendants' negligence, ” Zions would not have had to pay settlement money to others. Id. at 326. On that basis, Zions sought reimbursement of the settlement money from Fox and Foote. But the Utah Supreme Court held that Zions was not allowed to recover any portion of that settlement.

Whether we characterize Zions' claim as one for indemnity, partial indemnity, contribution, or negligence, Zions must still show that the conduct of Fox and Foote caused its losses. Those losses, however, can be measured only by the undifferentiated sum Zions paid in settlement [to earlier ...

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